Indonesia raise IDR620 billion from sukuk

Indonesia raised IDR620 billion from sales of Islamic bonds (sukuk), less than the IDR1 trillion rupiah planned.
The government sold 300 billion rupiah of 9.25 percent Islamic bonds, known as sukuk, due Sept. 15, 2015 to yield 8.52 percent, a ministry statement said. Goverment also sold IDR320 billion of 10.25 percent sukuk due in March 15, 2030 at a yield of 10.53 percent, the statement said.
PT Bank Mandiri Tbk, PT Bank Rakyat Indonesia, PT Danareksa Sekuritas and PT Mandiri
Sekuritas were among 16 primary dealers appointed by the government to help sell the Islamic bonds, according to a finance ministry document.
goverment cancelled the sale of 1 trillion rupiah of Islamic bonds in February as investors demanded higher returns than the government was willing to pay. In January, the government raised 950 billion rupiah from the sale of Islamic treasury notes, less than the 1
trillion rupiah it sought.
The bonds are of the Ijarah type. Islam Shariah law forbids interest payments, so Ijarah sukuk are based on a leasing contract and pay a profit to investors rather than interest.